Kazakhstan’s Senate to Review the Bill Banning Foreigners from Purchasing or Leasing Farmland
The Kazakhstani parliament is considering a bill to ban the purchase and leasing of farmland by foreigners. After being approved by the parliament’s lower chamber, Mazhilis, during the first two readings, the bill has now been sent to the Senate for further review. The bill was first proposed by Kazakhstani President Kassym-Jomart Tokayev at a meeting of the National Council, where he addressed the contentious issue of land reforms.
Tokayev’s statement comes ahead of the expiration of the moratorium on the sale of farmland and its lease to foreigners that was put in place in 2016 and is effective until December 31, 2021. The meeting concluded with a decision to establish a commission on land reform to implement amendments to the Land Code. As Tokayev further noted, “the land ownership issue has always been important to people; it is a cornerstone and a sacred symbol of our statehood.”
The issue of land reform has been controversial, inciting mass protests in several cities in 2016. The protests took place in response to amendments to the Land Code that allowed 1.7 million hectares of agricultural land to go up for auction and to extend the term of land leases by foreigners from 10 to 25 years. Although these changes were meant to increase investment in the country’s agricultural sector and to facilitate its economic growth, they spurred popular discontent, with many people fearful that the amendments would put Kazakhstan’s territorial integrity and national sovereignty at risk.
According to Kazakhstani political scientist Dosym Satpayev, “the land issue is not only a political or economic matter, but also the question of the Kazakh mentality, which treats land as a sacred concept.” Satpayev also noted that anti-Chinese sentiments are growing among the public. As thousands of people took to the streets in Atyrau, Aktobe, and Semey, some protest signs read, “Do not sell land to China.” People also expressed concern that the 2016 amendments to the Land Code would significantly increase China’s already growing presence in the country. As China has allocated multibillion-dollar loans to Kazakhstan’s oil, gas, and transport industries, and has developed joint projects, including the construction of a polypropylene factory in Atyrau and the modernization of an oil refinery in Shymkent, there is concern that land reform could lead Kazakhstan to grow dependent on its neighbor.
In reality, expansion of land leases by foreigner to 25 years should have had little impact on foreign investment in Kazakh agriculture. Although most jurisdictions require good husbandry practices, such as soil conservation, to be used on leased land, leaseholders inherently lack either an incentive to invest in land stewardship for the long term or the ability to use the land as collateral to finance improvements and operations via debt. The real issues are thus the perceived threat that Chinese interests, among others, could eventually buy Kazakhstan farmland, coupled with the negative emotional response of traditionally nomadic people to selling land to outsiders.
Tokayev’s recent announcement in part constitutes an effort to “stop the rumors” about the possibility of selling farmland to foreigners and should put an end to the debate on land reform. Tokayev emphasized the importance of identifying ways to improve agriculture and to attract new investment and technologies. In particular, improving land use efficiency and water management should be priorities for sustainable development of the sector. He also stressed the importance of digitization of land records, in order to bring greater transparency and security to the agricultural sector.